News

Biomass power producers shut down during power crisis

Published

4 years ago

2022/06/26

by Ifham Nizam

Renewable energy producers who generate electricity using biomass (wood chips) capable of supplying 20 MW (140 million kWhs) per year to the CEB grid, have shut down because what they are paid for such power is not sufficient to even cover their variable costs for biomass and other day to day operating costs such as salaries, chemicals, etc.

These producers, who have entered into Power Purchase Agreements (PPAs) with the CEB, have jointly written to the CEB requesting an increase in their tariff if they are to restart operations.

They have pointed out that the costs used in the formula used to calculate their annual tariff rate is far below actuals. The calculation uses Rs 14 per kWh as the cost of fuel wood, whereas the actual cost today is Rs 21 per kWh. Overheads and maintenance (O&M) and other related costs are assumed to be Rs 2 per kWh, whereas the actual cost is around Rs 6 per kWh, developers claim.

In their letter to the CEB, they point out that if the “correct” costs are used in the tariff formula, their tariff should be Rs 36.67 per kWh. With such a tariff they would be able to operate their plants and also service their bank loans.

They say that the CEB’s cost for generating power from its own plants, including coal, is substantially higher than the Rs 36.67 per kWh they have requested.

They have calculated that if the CEB pays them the requested tariff, instead of using their own plants to generate this power, it would save Rs 3,220 million per year. Also, since they use a local biomass and not imported coal and oil required by the CEB’s plants, the country would save USD 20 million per year foreign exchange.

Unlike in the case of other renewable energy technologies such as hydro, wind, and solar, biomass plants can operate reliably round the clock and, in CEB terminology, are ‘base load’ plants similar to the coal plants. The energy supplied by such plants is therefore more valuable to the CEB than power from other types of renewable energy.

The problem has been made worse by the fact that the CEB has not paid biomass developers (as well as other renewable power suppliers) for the power they have supplied to the CEB from December 2021 to date.

In their letter, developers have pointed out that they, unlike other renewable energy technologies (hydro, wind and solar) whose “fuel” cost is zero, have large recurring costs on fuel.

They have requested the CEB to expedite the payment of their past invoices and give them priority over other renewable energy developers as, without such payments, they cannot operate due to severe cash flow shortages.

One of the larger developers, Mirigama Dendro Power (MDP) located near Giriulla, has already informed its bankers that it is unable to service its loans and has asked the banks to take over its plant which was pledged as collateral.

The banks don’t want to foreclose because with the present tariffs no one would want to take over the plant even if all debts were settled and the plant was sold for a token one rupee.

This plant originally cost Rs 1.2 billion to build and it would cost Rs 3 billion to replicate today. Without an increase in the tariff as requested, MDP says they can’t remain in business and their plant will be only good for scrap. Other biomass developers whose plants are all currently stopped will soon be following MDP and closing down permanently, they say.

Biomass developers wrote to the CEB Chairman M M C Ferdinando two weeks ago and he recently met with a group of them. While the Chairman appeared to understand the situation, all he could say was that he would forward the request to the CEB’s tariff committee.

From past experience, developers claim that it will take months, if not years, for anything to come of this. By this time all biomass plants would have laid off their staff and most likely, been dismantled.

It is ironic that at a time when the country is suffering from power and foreign exchange shortages, an option to provide a substantial quantum of high-quality power to the grid at a price lower than any other alternative available today and to save foreign exchange, is not being prioritized, the developers urge.

Power and Energy Kanchana Wijesekera said that he will make the maximum effort to feed renewable energy-based power into the CEB grid as soon as possible. In the case of biomass developers, there is approximately 20 MW of such power capable of generating 140 million kWh annually already connected to the grid. But this has become unavailable because of the inadequate tariff.

As detailed above, the requested tariff is financially beneficial to the CEB and the country. Here is a clear opportunity for the minister to intervene to “walk the talk” and bring this 20 MW back into the grid, biomass developers say.

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News

CEB engineers raise alarm over power sector stability

Published

19 hours ago

2026/02/27

Thilina Walpola

A senior electrical engineers attached to the Ceylon Electricity Board (CEB) have warned that unresolved structural and policy issues within the power sector could threaten the long-term stability of the national grid, urging authorities to act swiftly to address mounting technical and administrative concerns.

Speaking on condition of anonymity, they said the electricity network was operating under increasing strain due to delayed infrastructure upgrades, financial constraints, and growing demand.

“The national grid is not something that can be managed casually. It requires systematic planning, preventive maintenance, and timely investment. If these are compromised, the risk to system stability increases,” the engineers said.

They noted that several transmission and substation modernisation projects were behind schedule, while ageing thermal plants continued to shoulder a significant portion of the country’s base load demand.

“Engineers are committed to ensuring an uninterrupted supply. But professional expertise must be respected in decision-making. Technical matters cannot be subjected to short-term political considerations,” the engineers added.

Meanwhile, the powerful Ceylon Electricity Board Engineers’ Union (CEBEU) echoed similar concerns, warning that failure to address long standing professional and structural issues could have serious consequences for the power sector.

In a statement, the CEBEU has said that engineers have repeatedly called for reforms that safeguard the integrity of the utility and ensure that operational decisions remain grounded in technical evaluation.

“The electricity sector is a critical national asset. Any attempt to weaken institutional safeguards or bypass professional consultation will directly impact service reliability and long-term sustainability,” the union said.

The CEBEU has stressed the importance of transparent engagement between policymakers and technical personnel, noting that morale among engineers could be affected if their concerns continue to go unheard.

Industry analysts point out that the power sector plays a central role in Sri Lanka’s economic recovery efforts, particularly as the country seeks to expand industrial activity and attract investment. Stability in electricity supply remains a key determinant of business confidence.

The senior engineer stressed d that the objective of raising concerns is not confrontation but preservation of the grid’s integrity.

“Our responsibility is to the public. Electricity powers hospitals, industries, and homes. Safeguarding the system is a national duty,” he said.

With tensions simmering within the sector, stakeholders say meaningful dialogue between authorities, engineers, and trade unions will be crucial in ensuring that Sri Lanka’s power infrastructure remains resilient in the face of growing challenges.

By Ifham Nizam

News

CB identifies 24 pyramid scams in Sri Lanka

Published

19 hours ago

2026/02/27

Thilina Walpola

The Central Bank (CBSL) yesterday announced that investigations had identified 24 companies and applications operating prohibited pyramid schemes.

In a public notice issued under Section 83C of the Banking Act, No. 30 of 1988 (as amended), the CBSL said the following entities had been “ascertained and determined as prohibited schemes”: Tiens Lanka Health Care (Pvt) Ltd, Best Life International (Pvt) Ltd, Mark–Wo International (Pvt) Ltd, V M L International (Pvt) Ltd, Global Lifestyle Lanka (Pvt) Ltd, Fast3Cycle International (Pvt) Ltd, Sport Chain App / Sport Chain ZS Society Sri Lanka, OnmaxDT, MTFE App / MTFE SL Group / MTFE Success Lanka / MTFE DSCC Group, Fastwin (Pvt) Ltd, Fruugo Online App / Fruugo Online (Pvt) Ltd, Ride to Three Freedom (Pvt) Ltd, Qnet / Questnet, Era Miracle (Pvt) Ltd and Genesis Business School, Ledger Block, Isimaga International (Pvt) Ltd, Beecoin App and Sunbird Foundation, Windex Trading, The Enrich Life (Pvt) Ltd, Smart Win Entrepreneur (Pvt) Ltd, Net Fore International (Pvt) Ltd / Netrrix, Pro Care (Pvt) Ltd and Shade of Procare (Pvt) Ltd, SGO / sgomine.com and I.C.A.N Advertising (Pvt) Ltd and its affiliates icanonlineadvertising.com, bannercuts.com, bannercuts.lk, bannercuts.net and bannercuts.org

The CBSL said pyramid schemes, also referred to as multi-level marketing or direct selling schemes in certain instances, operate as recruitment-based programmes in which members enlist others into an expanding “downline” structure resembling a chain letter.

Under such arrangements, a portion of the fees paid by new recruits is channelled upwards to earlier participants, known as the “upline”, who are fewer in number.

The Central Bank warned that such schemes are inherently unsustainable, with the vast majority of participants at the lower tiers eventually losing their investments, while only a small number of early entrants are able to recover or profit from the funds contributed by subsequent recruits. It noted that when a pyramid scheme collapses, up to 99 per cent of those in the lower levels risk losing their money.

News

Church urges patience, warns against interference with Easter attacks probe

Published

20 hours ago

2026/02/27

Thilina Walpola

Director of Communications for the Archdiocese of Colombo, Rev. Fr. Cyril Gamini Fernando, yesterday expressed confidence that ongoing investigations into the 2019 Easter Sunday terror attacks would yield meaningful results and urged the public and all stakeholders to exercise patience and allow the probe to proceed independently.

Addressing a media briefing in Colombo yesterday, Fr. Fernando called on all parties to refrain from interfering with the investigations, warning that any attempt to obstruct the process would amount to a grave injustice to the victims.

He said he believed there was credible evidence to warrant the arrest of military intelligence veteran Maj. Gen. (Retd.) Suresh Sallay.

Referring to the coordinated bombings on April 21, 2019, which targeted churches and hotels and claimed nearly 300 lives, Fr. Fernando described the attacks as a “barbaric” act and a “massacre” that killed worshippers attending Easter services as well as individuals from different religious and ethnic communities.

By Norman Palihawadane